Observations by an academic researcher on the use of “open”-ness as a competitive strategy, with a particular interest in coping with the commoditization of information goods and technologies in an Internet-enabled world.

(As a side note, I heard the news during the hourly CBS Radio national news broadcast. How often does a piece of of software make radio news?)

Back in the dot-com era (1999), AOL Time Warner bought Netscape at an inflated price ($9 billion) with its inflated stock as currency. But it was all downhill from there, with layoffs followed by layoffs and plummeting market share. AOL has toyed with reviving Netscape in the past, but Netscape never really recovered from losing the browser wars to Internet Explorer.

Charles Ferguson’s book did a great job chronicling what went wrong inside Netscape, with lousy software engineering and a lack of adult supervision being major contributing factors.

Fortunately, in 1998 AOL released Netscape code as open source (creating Mozilla.org). This marked perhaps the first major corporate-sponsored open source development project. (Sleepycat and MySQL use open source as a distribution strategy but it plays a minor role in the development efforts). In 2003, AOL handed over the keys to Mozilla to an independent foundation, thus assuring the browser a life beyond AOL-Netscape’s failed business model. (To the degree that getting crushed by a free Microsoft browser constitutes failure).

Through the combined efforts of individual open source contributors, charitable/foundation types, and corporate sponsorship (mostly big IT companies like Sun and HP), Mozilla has become a big success, mainly through its flagship Firefox browser. Firefox now has about 15% market share, which is far less Netscape’s near-monopoly, but the only effective competition IE has had in the past 5 years. If the Netscape users switch to Firefox, its share could conceivably pass 30%, which both the Netscape and Mozilla pioneers would consider vindication of the past decade’s efforts.